Background
RCOM had acquired spectrum in various auctions conducted by DoT and was required to furnish Financial Bank Guarantees (FBGs) to secure deferred annual spectrum instalments payable to DoT. These FBGs were issued by various banks on behalf of RCOM in favor of DoT.
Details of Invocation
DoT has invoked/encashed FBGs citing alleged default in payment of deferred annual instalments for spectrum acquired through various auctions. The specific invocations are:
- 2013 Spectrum Auction - Yes Bank Limited: ₹281,44,90,001 (₹281.45 crore)
- 2015 and 2016 Spectrum Auctions - Punjab National Bank: ₹114,09,30,516 (₹114.09 crore)
- 2015 Spectrum Auction - Canara Bank: ₹157,07,55,606 (₹157.08 crore)
- 2014 and 2015 Spectrum Auctions - State Bank of India: ₹249,29,21,711 (₹249.29 crore)
Total Aggregate Amount: ₹801.91 crore approximately
Financial Implications
The invocation/encashment of FBGs may have corresponding financial implications for RCOM to the extent of the amounts invoked/encashed by DoT. The Company is currently examining the detailed financial and legal implications, including consequential impact on the Company's liabilities and claims in relation to the underlying spectrum payment obligations.
Current Status and Context
RCOM is under Corporate Insolvency Resolution Process (CIRP) pursuant to the Insolvency and Bankruptcy Code, 2016, effective from June 28, 2019. The affairs, business, and assets are managed by Resolution Professional Mr. Anish Niranjan Nanavaty, appointed by the National Company Law Tribunal, Mumbai Bench.
The Company is examining the basis and manner of invocation of the respective FBGs and will take appropriate steps in accordance with applicable law and the ongoing CIRP.